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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
×
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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
×
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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
×
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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
×
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Suggested Citation:"Chapter 2 - Findings." National Academies of Sciences, Engineering, and Medicine. 2002. e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management. Washington, DC: The National Academies Press. doi: 10.17226/24725.
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5CHAPTER 2 FINDINGS SUPPLY CHAIN—CONCEPT OVERVIEW The phrases “supply chain” and “supply-chain manage- ment” have become a part of the business lexicon although not everyone shares a universal understanding or use of these terms. This report uses the following definitions of these (and related) terms: • Supply Chain: “The network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical dis- tribution, and cash” (8). • Supply-Chain Management: “. . . the collaborative effort of multiple channel members to design, imple- ment, and manage seamless value-added processes to meet the real needs of the end customer” (9). • Supply-Chain Community: Sets of trading partners that define a complete supply chain. • Supply-Chain Design: The determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of facil- ities, the products, the modes of transportation, and sup- porting information systems. In theory, the advantage of the supply-chain approach is that a community of trading partners can leverage their respective core competencies, thus producing greater value through their cumulative efforts than would be possible if they were not col- laborating. In such an integrated supply chain, the end cus- tomer is the focus of the entire supply-chain community, with unfiltered electronic information exchanged freely among com- munity members. This exchange allows trading partners to leverage information to reduce miscommunication (i.e., waste) among firms and enhances internal processes (i.e., increases value). Creating such partnering relationships requires a long- term commitment of time and resources to develop the trust needed to freely share information among organizations and is a major challenge to creating supply-chain communities. The supply-chain approach encourages organizations to adopt a customer-centric approach to streamline business processes and to meet most efficiently the end customer’s needs. For many firms, this approach requires reorganizing from a functional business model—one with organizational “silos” for operations, purchasing, maintenance, and so forth— to a process-aligned organization. In such process-focused organizations, each group becomes a supplier to one part of the organization and an internal customer to another, with an overall target of meeting the needs of the end customer. Fig- ure 1 illustrates this concept. For a community of supply- chain partners, extending the process across organizations allows firms to react more quickly and accurately to the end customer’s needs, supporting better decisionmaking at each point in the supply chain. This reduces waste and provides opportunities for cost saving or improvements in response time. Enlisting trading partners with a relative advantage in core competency in any required process step provides an opportunity to enhance the value of overall product or service. To better understand the supply-chain concept, consider the impact of the traditional focus on purchase price when sourcing goods: The price paid for source materials has a direct impact on an organization’s profitability and is an attrac- tive performance measure because of its ease of use. How- ever, because most vendors offer reduced unit prices for larger orders, a natural effect of focusing on purchase price is to encourage large-volume buying. Storing inventory requires physical facilities, absorbs resources to monitor and maintain, and subjects materials to damage and “shrinkage” (i.e., theft) while changing product needs threaten unused inventory with obsolescence. Inventory is beneficial only when it allows an organization to meet customer needs more quickly while the indirect costs of having excess inventory are seldom calculated or included in the total price of goods or services (10). For example, buying janitorial supplies in large quantities usually results in significantly better pricing but can result in having more supplies on hand than available space supports, creating overcrowded warehouse conditions, which decreases efficiency. Even more importantly, inven- tory represents funds that could be used for other organiza- tional purposes. Supply-chain management forces the orga- nization to understand the interrelation of such decisions and to focus on activities that add value while avoiding (or min- imizing) activities that add cost or absorb resources. The supply chain–management concept offers a number of highly desirable benefits to organizations, but implementa- tion efforts often face significant obstacles. In a 2001 study entitled Achieving World-Class Supply Chain Alignment: Benefits, Barriers, and Bridges (11), the authors engaged in a major effort involving literature review, surveys, and case

6studies to gain insight into the key issues for applying supply- chain strategies. Table 1 identifies report findings on the top 10 benefits, barriers (i.e., issues that harm implementation efforts), and bridges (i.e., success factors) to supply chain– management implementations. e-PROCUREMENT AND BUSINESS-TO- BUSINESS MARKETPLACES e-Procurement is the purchase and sale of supplies over the Internet. e-Procurement’s role in the supply chain is one of process enhancement because e-procurement enables increased speed, enhanced communications, and reduced costs (in both process and product) for trading partners through technology application. e-Procurement consists of the following overlapping areas: 1. Buying process automation, 2. E-markets, 3. Buyers’ consortia, 4. Industry portals, and 5. Private trading exchanges. Buying Process Automation Use of the Internet to purchase indirect (i.e., non-production) materials were the earliest and most successful attempts of the innovation made possible by the Internet. Because such activities were usually decentralized and not closely man- aged, indirect material purchases typically consumed a dis- proportionate amount of resources. The new applications promised to • Automate the buying process, • Relieve the purchasing workload, • Reduce administrative cycle time, and • Reduce errors. To accomplish these goals, companies created applications (typically using web browsers as the user interface to increase user adoption speed) with the company intranet serving as the communications backbone. While these systems typically succeeded in increasing administrative efficiency, the major savings actually resulted from better information on aggre- gate buying practices and volumes (which facilitated vendor Rough Mill Assembly Finishing Shipping Retailer Raw Materials (wood, etc.) End Customer Figure 1. Example of a furniture industry supply chain. TABLE 1 Top 10 benefits, barriers, and bridges to supply-chain management Benefits Barriers Bridges • Increased customer responsiveness • More consistent on-time delivery • Shorter order-fulfillment lead times • Reduced inventory costs • Better asset utilization • Lower cost of purchased items • Higher product quality • Ability to handle unexpected events • Faster product innovation • Preferred and tailored relationships • Inadequate information sharing • Poor/conflicting measurement • Inconsistent operating goals • Organizational culture and structure • Resistance to change—lack of trust • Poor alliance management practices • Lack of supply-chain vision or understanding • Lack of managerial commitment • Constrained resources • No employee passion/empowerment • Senior and functional managerial support • Open and honest information sharing • Accurate and comprehensive measures • Trust-based, synergistic alliances • Supply-chain alignment and rationalization • Cross-experienced managers • Process documentation and ownership • Supply-chain education and training • Use of supply-chain advisory councils • Effective use of pilot projects

7pricing negotiations) and enabled companies to standardize indirect buying practices, with significant savings. Companies have long negotiated standard contracts for materials but enforcing buying decisions tends to be difficult in large organizations, especially for low-value items. When employees ignore directives to make purchases via these contracts, contract provisions for discounts based on pur- chase volume frequently fail to provide the anticipated ben- efit. A well-designed process automation application creates a process that provides the user with a faster and easier way to secure needed products while forcing buyers to use com- mon systems and to order standard products from corporate- wide contracts. Automated purchasing involves one buyer and one seller, with the pricing schedule negotiated in advance. This arrange- ment is referred to as a “one-to-one” business-to-business (or “B2B”) transaction. Other e-procurement transactions may involve “one-to-many” or “many-to-many” transactions. Purchasing automation systems are available from many suppliers, but all entail additional work to integrate them into existing accounting systems and may require desktop hard- ware, software, or system upgrades. Alternatives to purchas- ing and installing such systems include using web-delivered services provided by application service providers (ASPs). This approach reduces the investments in hardware, software, and systems but requires the ongoing payment of subscription fees. More importantly, ASP applications for automated pur- chasing still need to be integrated into back-office accounting systems in order to provide the same level of business integra- tion as purchased automation systems. Regardless of whether using purchased or ASP-provided automated buying systems, organizations need to revise business processes and provide appropriate training to support such implementations. e-Markets “e-Markets” are Internet-based marketplaces created to facilitate bringing buyers and sellers together. Starting as elec- tronic catalogs, e-markets now cover nearly every product and service bought and sold. Depending on the service provided, e-markets may link one-to-one (i.e., catalog buys); one-to- many (Requests for Proposals and auctions); or many-to-many (project collaboration). Many e-markets have roots in the Internet boom of the late 1990s, with funding frequently provided by venture capitalists. The primary attraction of e-markets is that they are viewed as “neutral”—favoring neither buyer nor seller. This is a signifi- cant advantage given that attracting seller participation is a major problem for most e-procurement initiatives (12). Addi- tionally, because many e-markets rely on transaction fees as a primary revenue source, these services have a powerful motivation to actively promote the site, solicit new sellers and buyers, and develop additional services. The major con- cern regarding e-markets is one of viability. The collapse of many Internet-based firms represents a danger to the avail- ability of funding for many of these operations and places pressure on these firms to become profitable quickly. Addi- tionally, challenges from buyers’ consortia and industry por- tals represent competitive threats to these firms. Among the services developed by e-markets and other elec- tronic exchanges to attract more customers are the following: • Community information (industry, product, employment, etc.); • Auctions (forward and backward); • Demand aggregating; • Process automation software (note the overlap with the Buying Process Automation category); • Financing options; • Transportation and logistics options; • Product design support; • Collaborative tools (such as the ability to track project progress online or to conduct Internet-based meetings [i.e., “netmeetings”]); and • Other specialized services. e-Markets are typically market- or service-focused. Exam- ples of market-focused e-markets include chemicals or met- als; printing is an example of a service-focused e-market. Buyer Consortia Buyer consortia are buyer-owned exchanges in which multiple firms share the cost of creating and managing the exchange. Transactions may be one-to-one, one-to-many, or many-to-many. Because of competitive pressures, buyer con- sortia face difficulties in establishing site operation agree- ments among participants and maintaining cooperation over time. The source of initial and ongoing funding also tends to be problematic. To secure seller participation, buyer consortia must overcome seller concerns about the perceived imbalance of power between buyer and seller and the threat of increased pressure on seller profit margins. Industry Portals Industry portals share similarities with buyers’ consortia but tend to be broader-based and are frequently a cooperative effort of industry associations. Most industries now have Inter- net portals, apparently motivated by the desire to establish an e-commerce presence and to send a positive message about the “technology-savvy” nature of organization members. Because industry portals typically enjoy some level of broad-based support by industry members, they provide an opportunity to establish communication standards within an industry that could facilitate true supply-chain management. With common standards, companies could more easily share

information among organizations and vendors, easing justi- fication for the investment in time and resources to create such links. Because of this, firms that develop supply-chain and enterprise-resource-planning (ERP) software are aggres- sively pursuing these portals as a product market. Private Trading Exchanges Private trading exchanges (PTXs) are a relatively recent development, reflecting efforts by companies to expand on the supply-chain concept by encouraging more collabora- tion and integration among trading partners. Key features of a PTX include increased security and control, which sup- port increased confidence and information sharing among participants. In a PTX, a single company creates an exchange and rec- ommends (or requires) its suppliers to participate. As such, firms using a PTX approach must be able to justify the cost and support the technical complexity of creating and main- taining a PTX and must have sufficient market power to motivate supplier participation. Because of these factors, early adopters of the PTX approach tend to be large firms such as Pitney Bowes, Inc., Harley-Davidson, and Eastman Chemi- cal, which can support expenditures needed to create such systems (13). e-PROCUREMENT: ADOPTION RATES AND APPLICATION TRENDS e-Procurement is expanding rapidly, driven by reported savings of 15% to 20% on item costs and up to 80% in process cost savings (14, 15). According to a recent survey of business e-procurement activities in the first quarter of 2001, the following are the current and planned use of four 8 types of e-procurement technology (see Table 2) (16): auto- mated purchasing systems, e-markets, auctions, and buyer consortia. A survey by the Institute for Supply Chain Man- agement and Forrester Research further supports the growth of e-procurement, noting the following quarter-to-quarter increases in Internet use for indirect and direct material pur- chases during the fourth quarter of 2001 (see Table 3) (17): While there seems to be a consensus on the importance of the Internet and e-procurement, many firms seem unclear of how to progress. In an article summarizing the findings of the E-Procurement Benchmark Survey (18), Pastore indicates that most organizations are taking a “wait-and-see” attitude toward e-procurement, identifying the following as the top issues blocking e-procurement adoption: 1. Need to integrate e-procurement systems with legacy/ ERP information systems, 2. Lack of technology standards, 3. Concerns about dealing with anonymous vendors, 4. Difficulty of identifying optimal solutions for each company, 5. Lack of organizational readiness, and 6. Lack of supplier participation. Pastore further quotes Robert Palmer, a coauthor of the E-Procurement Benchmark Survey, as saying: “If this [e-purchasing/inventory integration] cannot be done within a reasonable time frame, the market’s interest in this technol- ogy may drop considerably.” SUPPLY-CHAIN SUCCESS STORIES Two firms are frequently cited as leading examples of supply-chain integration: Wal-Mart and Dell Computer. These firms create long-term teaming arrangements with vendors, which support the information infrastructure investments TABLE 2 e-Procurement usage by type—first quarter 2001 and 2-year projection e-Procurement Type Currently Use or Plan to Use Projected 2-Year Growth Rate Automated purchasing systems 43% 445% e-Markets 24% 116% Auctions 20% 370% Buyer consortia 14% Not indicated TABLE 3 e-Procurement: percentage of total purchases— third and fourth quarter 2001 Purchase Type Q3 2001 Q4 2001 Indirect materials 7.1% 9.5% Direct materials 5.3% 6.2%

9volume standardized products. For standardized products, there are substantial (50% to 75%) cost savings over the for- mer centralized purchasing process. These items were bid at a cost savings of $9 million. For more than 8,000 additional products not in the other catalogs, the buyers receive 38% off the supplier’s list price (20). Commercial Carriers’ Supply-Chain Approach Overnite Transportation is a nationwide, less-than-trailer- load (LTL) commercial motor freight carrier with 16,783 trailers; 4,564 tractors; and 91 straight trucks (21). Overnite uses a modified version of a commercial off-the-shelf (COTS) software package (1) for vehicle maintenance and inventory management and (2) as its system for tracking vehi- cle maintenance, parts usage, and failure analysis. This sys- tem incorporates an electronic parts-ordering function as part of the base-system functionality, with electronic linking to vendors via electronic data interchange (EDI). Overnite’s approach places hand-held scanners and touch- screen devices at each mechanic’s workstation, tracking all maintenance by vehicle, part usage, failure code, and so forth. Each station transmits this information to the maintenance system, which includes error checks that ensure the accuracy of the information gathered—for example, a repair code that indicates an alternator failure but does not show the issuance of an alternator would result in an error message. Through the information provided by its vehicle maintenance system, Overnite performs failure analysis to track vehicle, system, and component performance, including searching for prob- lem patterns. Using this information, Overnite addresses prob- lems with vendors, seeking warranty adjustments and adjust- ing component sources when necessary. These experiences then become part of the new vehicle-specification process. Overnite indicates that by combining vehicle and component performance information with asset-management strate- gies such as reduced vehicle-replacement cycles, advance- negotiated fleet trade-in values, and increased focus on pre- ventive maintenance, the carrier has been able to significantly reduce the number of maintenance facilities, the size of the mechanic workforce, and investment in parts and inventory while increasing vehicle availability. Overnite personnel would not divulge the total savings achieved through the combination of these actions. Overnite’s integrated parts inventory management system uses an “ABC” stocking system, with minimum and maxi- mum parts stocking levels for all “A” and most “B” parts while many “C” parts are replenished through the use of vendor- managed inventories (VMI). When Overnite’s system sug- gests the need to reorder a part, the district maintenance man- ager electronically reviews and transmits the requisition to the appropriate vendor. To support this strategy, Overnite negotiates 3-year contracts with prime vendors to provide needed to provide real-time information at the volumes required by these firms. The availability of such information provides a significant advantage to participating supply-chain partners, allowing suppliers to see the daily demand for their products and to make appropriate business decisions. In return, Wal-Mart and Dell gain the ability to quickly respond to shifts in customer preferences, ensuring that they have the products customers want and allowing these firms to expand their respective market shares. These gains translate into advanta- geous pricing from suppliers and strengthen Wal-Mart, Dell, and their supply-chain partners’ competitive positions. While the success of companies like Wal-Mart and Dell provide examples of the advantages made possible through leveraging supply-chain practices, it is problematic to attempt to directly apply these companies’ experiences to transit agen- cies. Transit agencies are service-based organizations, pri- marily operating in the public (or not-for-profit) sector. Even within the private sector, few service-based organizations have adopted a supply-chain approach to providing core busi- ness operations. Instead, many service firms apply supply- chain principles to reduce both the direct and indirect costs of support functions such as purchasing, information inter- change, and funds transfer. The following cases describe applications of supply-chain strategies for possible emula- tion at transit agencies. Public Sector “Just-in-Time” Materials Ordering To better aggregate state agency purchasing and to provide an easier means of securing office supplies, in January 1997, the California Department of General Services contracted with Office Depot to provide office supplies for all California state agencies. This contract allows employees to order from two different catalogs: the first containing approximately 350 of the most frequently purchased office items with pricing at 50% to 70% off list, and the second containing about 10,000 items that are available at 42% below the list price. The con- tract requires that office supplies be delivered within 24 h to locations in urban areas and 48 h to outlying areas; with orders processed via telephone, facsimile, mail, or the Internet; and with the purchaser receiving a fax to confirm the pricing. This process allows office supplies to be delivered “just-in-time,” minimizing the state’s total amount of inventory and provid- ing the state with a “virtual” automated purchasing system (19). Additionally, the state now issues only one vendor pay- ment per month, tremendously reducing the cost of issuing payments to multiple vendors. The California Department of General Services cites the following results from this program: the Office Depot supply contract has increased customer satisfaction through cost- effective access to 8,500 supplies versus the former 350 high-

multivendor nationwide parts delivery directly to the appro- priate maintenance facility within specific time require- ments. For VMI items, the vendor may check items on a fixed schedule or may wait to be notified when stock reaches a minimum level. In either case, the vendor directly places items in the location designated (e.g., in the parts room or on the shop floor). Overnite also supplements these contracts with vendor-stocking contracts (basically, items placed on consignment) on certain items such as batteries. An Overnite strategy that significantly reduced supply- chain needs (and therefore overall maintenance demands) was the abandonment of in-house rebuilding efforts (engines, transmissions, and other components) in favor of purchasing ready-to-install remanufactured items. This represents an asset-management strategy directed toward allowing vehicles to return to service quicker, which reduces the need for spare vehicles. Overnite’s experience indicates that spare vehicles tend to absorb disproportionate maintenance resources, as spare vehicles (i.e., “spares”) tend to be older and considered less desirable for use by employees. Accordingly, spares have low utilization levels, and employees may try to avoid using spares by identifying minor (or non-existent) problems for cor- rection on those units. Troubleshooting reported problems with spare units absorbs mechanic resources to evaluate and correct the problems. By focusing on strategies that minimize vehicle downtime, the need for spare units is reduced, with positive impact on supply-chain needs—especially when spare units differ significantly in year, make, or model from the majority of the fleet. Conversations with area managers for Old Dominion Truck Lines (a regional LTL carrier with more than 2,500 tractors and 10,000 trailers) and Penske Truck Leasing (a nationwide truck-leasing and vehicle maintenance firm with customers that include transit operations) suggest that most large com- mercial fleet operations have maintenance systems that are functionally similar to Overnite’s. However, Old Dominion and Penske contacts were unwilling to discuss specifics about their maintenance systems or provide information about results achieved using these systems. Overnite, Old Dominion, and Penske personnel indicated that the extent to which inventory management involves just vehicle parts or extends to other assets is a major variable with commercial fleet maintenance systems. For operations that must manage significant amounts of non-vehicle items, a warehouse management system may supplement (or pro- vide primary support for) vehicle parts management. Parts Procurement and Inventory Management— TxDOT and the U.S. Military TxDOT operates more than 7,600 vehicles and 9,500 pieces of equipment in a decentralized equipment environment (22). At its San Antonio–district maintenance operation, TxDOT uses an on-site vendor to operate its equipment parts pro- 10 gram. TxDOT refers to this program as the Texas Centralized Auto Parts System (TCAPS). TxDOT began this program in January 1996 and modeled it after the Contractor Operated Parts Store (COPARS) Program, which was started by the U.S. military during the 1960s and is still used to support its vehicles (23). The TCAPS contract required the vendor to purchase the existing TxDOT equipment parts inventory (including any obsolete inventory) and contained specific performance requirements for significantly improved parts availability (compared with previous availability provided by in-house personnel) at no increase in parts pricing. However, the TCAPS vendor received no operational funding from TxDOT, deriv- ing all vendor revenues from the sale of parts. The contract also capped profits from operations and required the vendor to submit monthly performance reports and an annual oper- ations summary to TxDOT. The TCAPS vendor currently operates the in-house parts operation with two vendor employees (instead of six TxDOT employees) at TxDOT’s San Antonio facility, using a vendor- provided inventory and parts procurement system. This pro- gram operates within a fraction of the space formerly used when TxDOT managed the parts operation, yet TxDOT indi- cates fewer parts-related delays and reduced equipment downtime. While total equipment parts expenditures have remained roughly equal to pre-TCAPS levels, significant efficiencies have been realized, including the following: • TxDOT pays for parts only when used, freeing funds for more productive agency use; • Six TxDOT employees formerly performing parts- related functions are now performing other agency duties; • Additional warehouse space is available for alternative uses; and • TxDOT no longer processes individual purchase orders; instead, TxDOT only processes a single, biweekly invoice from the TCAPS vendor. During fiscal year 1999, the district would have processed 5,400 purchase orders without TCAPS. Based on TxDOT’s estimate of $70 to process a purchase order, this would have cost $378,000 to process (24). In contrast, with TCAPS, the district processed 24 invoices during fiscal year 1999, result- ing in an annual savings of $376,320 (25). Inventory and Parts Management—Utility Fleets Like transit agencies, utility fleets face the challenge of maintaining specialized vehicles that may have limited local parts support. Additionally, utility fleets vary considerably in size and scope of operations, with some fleets operating over an entire state (or a multistate area) while others may cover only a single city or county. Asset-management decisions driving parts and inventory support needs and outsourcing

non-core competencies to leverage operations are utility fleet examples of supply-chain strategies. Asset Management Decisions Drive Parts and Inventory Support Needs Texas Utilities (TXU)—a large, multinational utility oper- ating more than 7,000 vehicles in Texas—uses equipment leasing to keep its equipment age down, reducing TXU’s parts and inventory management demands and supporting a preventive maintenance focus. TXU has only 25 mechanics as employees, relying on external vendors to service most vehicles. According to TXU’s transportation manager, Our [inventory management] strategy is to keep as little on the shelves as possible, even to the point where we’ve estab- 11 lished agreements with local suppliers that when we need automotive parts, we can just pick up the phone and they’ll run them over to us. (26) Outsourcing Non-Core Competencies Can Leverage Operations In 1992, Baltimore Gas and Electric (BGE) employed 18 people to operate a 5,000–sq. ft warehouse for vehicle parts support. Under pressure to reduce costs, BGE per- formed a 6-month study to evaluate the cost and service advantages of outsourcing, which it ultimately chose to do. The vendor selected brought its own inventory-management software and bought all BGE’s existing inventory. First-year savings for BGE was $500,000, which was attributed to the vendor’s expertise in parts procurement and savings avail- able through volume purchasing (27).

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TRB's Transit Cooperative Research Program (TCRP) Report 84: e-Transit: Electronic Business Strategies for Public Transportation, Volume 1, Supply Chain: Parts and Inventory Management examines the supply-chain concept and identifies supply-chain strategies used by nontransit fleets to reduce investments in parts and inventory while increasing fleet availability.

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